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Why Did the Seller Reject an Offer for That Home?
Why the seller rejected an offer to buy a home is really not all that important but it doesn’t mean a buyer might not want to know. Moreover, it might be the buyer’s agent who is more curious about why than the buyer. In my earlier years of real estate, like back when Jimmy Carter was in office, I would often feel like I was helping a buyer’s agent by explaining how the buyer could do better next time, but over the years I’ve come to conclude that trying to help was about the dumbest thing I could do. It’s not my place to try to help. I’m just the listing agent.
First, it doesn’t matter why the offer was rejected, the fact is it was. It didn’t meet some sort of criteria. There could be a bazillion reasons why an offer could be rejected but after the seller has accepted another offer, there is nothing the rejected buyer can do but wait for that buyer to cancel. If the seller is so inclined, the seller could agree to sign a backup offer with the buyer but many sellers dislike backup offers. They often prefer to retain the freedom to respond to fluctuations of the real estate market in the event prices later rise.
Second, short of discrimination / violating Fair Housing Laws, the seller can reject an offer for just about any reason. Sometimes it’s a toss of the dice.
Maybe you could look at it like a point system. Offers need to meet certain points. There is price, of course, terms of agreement, length of escrow, type of loan, possession dates, lender reputations, buyer’s agent reputations, amount of earnest money deposit, even to how the offer is written — whether error free, and each carries weight. When I try to help a seller weigh an offer against others, we add up the positives and look at the negatives. A negative would be a possible bad situation or red flag that could prevent the escrow from closing.
The final choice is always the seller’s. Anything I were to disclose to a buyer’s agent about why their buyer’s offer did not measure up would be subjective on my part and could open my seller to a potential lawsuit, so I don’t go there. My lips are zipped. Yeah, I might know what the seller told me as to why your offer was rejected, but unless I am representing a buyer under those circumstances, which I am not, those reasons will never pass through my lips.
Why the seller elected to reject an offer is not the buyer’s business.
Call Elizabeth Weintraub, Broker #00697006, at 916.233.6759.
Some Agents Are Dealing With Offer Rejection
A frustrated home buyer in Orange County called to ask why I thought that her offers weren’t being accepted and often, in many cases, were unacknowledged. I don’t know why she called an agent in northern California. Now, I don’t know the Orange County market because I haven’t worked in that area since the 1980s. I primarily sell real estate in Sacramento. But if that market is anything like Sacramento, entry-level housing is hot, hot, hot. Which means multiple offers. This buyer is trying to buy a short sale.
I asked the buyer if her agent had any experience working with short sales. The answer was no. I pointed out that some agents refer their clients to an agent with experience in exchange for a referral fee.
“But,” she moaned, “We’ve been writing offers since January; that’s when we moved in with our parents.”
Four months is a long time to be hitting a block wall. “If you don’t talk to your agent about this,” I answered, “You’ll still be living with your parents in September.”
That’s all the help I could offer because I cannot advise nor interfere with another agent’s transaction. It’s against the Code of Ethics.
I also received an offer from an agent on a Sacramento short sale listing after disclosing that multiple offers were coming. The agent offered list price and asked for the following:
- 3% concession to the buyer
- home protection plan
- pest report and completion certificate
- 2-year roof certification (which may require repairs)
- seller to comply with FHA requirements
I asked the agent why would she include all these things that the bank is unlikely to pay for? On top of which, with multiple offers, I can pretty much guarantee that every other offer will exceed list price by thousands, if not tens of thousands. Once the bank receives the estimated HUD-1 — even if every offer was identical in price — this agent’s offer would fall to the bottom of the pile because that net will be much lower than all the others.
The agent responded rather curtly, “Because we expect to negotiate those things with the bank.”
It’s not my place to tell another agent how to conduct her business, so I refrain from offering suggestions under these circumstances. The point is the bank will never negotiate with her buyers because those types of offers are rejected by the seller. Who wants to sit in escrow for 8 weeks with a buyer whose offer will be rejected or renegotiated? We want an offer that will be accepted first go around.
